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Only five companies bid for pay-TV licences
The Independent Communications Authority of SA's (Icasa) move to open up the pay-TV market has elicited an unenthusiastic response with applications for licences coming in below what was expected.
Hearings for individual commercial subscription broadcasting services (pay-TV) kicked off on Thursday (25 July) with presentations from Kagiso TV, a subsidiary of JSE-listed Kagiso Media, and start-up Siyaya TV.
The Siyaya TV board includes former SA Post Office chairperson Vuyo Mahlati as its chairman and TV personality Dali Tambo. The company is 100% black-owned with the Bakgatla Ba Kgafela Community Trust in North West holding a 40% stake, management 26%, Youth Development Group 4% and Women's Investment Trust 30%.
In total five applicants are making presentations over three days at the hearings. The three remaining presentations will be from Mindset Media Enterprises and Close-T Broadcast Network holdings on Friday (26 July) and Mobile TV on Saturday (27 July).
In the previous pay-TV hearings, held in 2007, five licences were awarded from a pool of more than 20 applicants. These were e.tv subsidiary e.Sat, Telkom Mobile, religious network Walking on Water-TV (WOW) and On Digital Media (trading as TopTV). MultiChoice completed the complement of winning bidders with a licence conversion.
Failures
Telkom Mobile had an initial budget of R7bn, but failed to take off and neither did WOW.
e.Sat, which has warned against awarding licences, abandoned its plans for a fully-fledged pay-TV operation and sold a dedicated news channel to DStv instead.
A depressed economy has resulted in diminished access to finance for pay-TV start-ups and this has been blamed for the poor response to the call for applications from Icasa. In addition, the demise of TopTV, which has now sought business rescue after sinking more than R1,2bn into its operations since launching in 2010, is another factor discouraging potential investors in a market where available premium content is in short supply.
Monopoly Pay-TV operator MultiChoice has tied most suppliers of popular television rights into long-term contracts.
Siyaya TV board member Aubrey Tau said in his company's presentation to Icasa that should it secure the licence it would not make the same mistake of wasting billions on its service. "We won't be spending R1,5bn - we'd rather buy e.tv for that.
"Our budget is very conservative as we are targeting a lower-income market. We'll be outsourcing a lot of our core functions, such as call centres and signal distribution to capable partners."
Kagiso TV was less forthcoming about its business case as it feared MultiChoice could easily implement parts of its strategy.
Kagiso Broadcasting's chief executive Omar Essack said that the network would be a good candidate for a licence as it was already part of an established media group.
Source: Financial Mail via I-Net Bridge
Source: I-Net Bridge
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